Holding a Monthly Family Financial Meeting

... And How It Can Benefit Your Marriage and Educate Your Children

Prior to our financial meltdown, my wife and I simply never sat down and talked about our finances. Right after our meltdown, we talked about things almost every day, but through our recovery, our discussions have slowly reduced themselves to the point where we’re effectively already having monthly family financial meetings.

And these meetings have become a big part of the financial glue of our marriage.

These conversations keep us on the same financial page and ensure that we both are open and clear about our goals, our dreams, our mistakes, our challenges, and our shared path in life. They let us constantly be a check against one another, making sure we both stick to our better behaviors and use each other as an inspiration for making good choices. If you’re in a long-term relationship with someone, I can’t possibly recommend a monthly financial meeting more highly.

What Our Family Meetings Look Like

Our meetings are really pretty simple. We go through any credit card statements and bill statements that we have, talk about any changes we should make, plan for anything that’s coming up, and set some goals for the next month, mostly along the lines of limiting unnecessary spending and deciding where our budget leftovers will go for the next month.

For the most part, we don’t need any sort of specific agenda or meeting time – we just do it every once in a while on roughly a monthly schedule. Some keys:

Everything is an open book.

There should be absolutely no secrets in such a meeting. If your spouse wants to know about a specific spending choice, be completely open about it, not defensive. If you’re getting defensive, that means you have something to hide – and that means there’s a problem that needs to be addressed together.

Make goals a big part of the meeting.

Not only big, long-term goals, but the shorter goals over the next month that will help you get there. Set goals together, even if the goals are very individual in nature. Then, throughout the month, offer each other encouragement. It’s hard to break a bad spending habit or to make new financial choices – use the motivation of goals and the constant encouragement of a loving partner to make the changes easier.

Sit down and talk in detail about your spending plan for the coming month – and also where your challenges and successes were over the last month. This discussion can provide a lot of insight into where you’re going – and where you’ve been – and that information together can help you to make better financial choices.

Love and respect each other, even if you have differences of opinion.

Money brings about strong feelings – don’t let these strong feelings overshadow the more important things in life. One good way to do this is to hold your partner’s hand during the meeting.

Involving the Kids

I am a big advocate of involving children in these meetings as early as possible, by age seven at the latest. Allow them to bring their own financial picture to the table – pay them an allowance, have them budget the money, and have them talk about their own successes. Here are some thoughts on how to incorporate kids into this picture.

Keep the open book philosophy.

Everything should still be wide open so that your kids can see the financial reality of being adults. They need to know how much you’re spending each month to keep the roof over their head and the food on the table – as well as giving an idea of all of the little expenses that eat away at the big pile of money.

What about privacy?

Many parents like to hide behind a veil of privacy, saying that it’s none of their children’s business how they spend their money. My argument against that is twofold: first, it makes a great educational opportunity for your kids impossible and second, it says that there’s something in your spending that you’re ashamed of. If there’s shame, that means that there’s something you personally need to improve in your life.

Naturally, I see no problem eliminating a few items with black highlighter in order to hide an upcoming gift or something, but if you’re sealing away most of your spending from your children, they’re missing out on a big learning opportunity.

Let them offer input towards goals – and have them set their own.

When you’re making large financial choices, let them have a voice in the decision, but don’t let them run the show, either. Where you should allow them a lot of control is in setting their own goals, both over the long term and over the next month. Help them identify good things to save for and encourage them to work towards those goals. This goes hand in hand with the idea of splitting an allowance into pieces for spending now, sharing with others, and saving for later – in effect, budgeting for kids.

Make some of the economic choices you have available to them.

This is a concept heavily advocated by David Owen’s excellent book The First National Bank of Dad. In it, Owen advocates that you should create a “virtual” bank for your kids with a very high interest rate – say, 5% a month – to teach them the value of saving very early. In other words, let’s say they have $20. They have the choice of putting that $20 in the “First National Bank of Dad” where it will earn $1 in interest every month, or they can spend it immediately. All they have to do to earn that $1 each month is simply not spend it. It’s a real choice for a young child and it introduces them to the dilemma of saving versus spending – and offers plenty of encouragement to make the “good” choice.

In The End…

At its core, the idea of a monthly money meeting is really all about communication. The more we talk about money with our family and the more we encourage each other to make good choices, the more likely we are to make good choices over the long haul. Even better, it’s a splendid opportunity to use ourselves as examples for our children, teaching them how to be financially responsible adults.

I love the idea of teaching children about the reality of money. Spending, saving, bills, etc., those are great things. But I wonder about the wisdom in showing your children every aspect of your finances.

Maybe I’m reading a little too much into your article, but my son truly has no business in knowing exactly how much I make, or how in debt I am. He’s 9, and I feel like if I share too much with him, it might overwhelm him, or make him feel as if he is the one responsible for my spending.

The reason that I feel this way is because when I was growing up, my parents were not that well off, and I was always nervous about their finances. I didn’t want to ask for things, because I thought if they bought me something, and then we didn’t have enough money later, that I was responsible.

I do teach my son about finances, but MY specifics aren’t necessary for him to learn about basics. I don’t want for him to feel responsible for my choices. I do want him to learn about the financial realities of life, but I don’t want him to think that he affects my financial life in a bad way. I don’t want him to blame himself if his father has a bad paycheck and we buy groceries on our credit card because we just didn’t have the funds.

How can we be as specific with a person whose emotional and mental maturity isn’t the same as we can with an adult? I’m honestly just confused.

Trent! Thank you for such a great post. My girlfriend and I currently live 385 miles apart but she’s moving to my area in 2 weeks. Since the begining, our relationship has been long distance. We are going to give it 6 months before we move in together and split the finances. In the mean time though we can work on our money communication using this technique. Can anyone please refer me to good books on money communications with a significant other? Thanks!!

I think working with the children is a tempered proposition. I think you MUST look at the maturity level of the children, or not only will they not understand, they may tell lot of people you are struggling.

We do it a little differently… I handle all our finances. Works for us, possibly because we don’t have an issue of one of us being a saver and the other spender – we both feel pretty much the same about how money should be handled.

We don’t involve our kids (6 and 8) in our big-picture finances. Only in small purchasing decisions. The little one is VERY curious to know our net worth (“mom, how much money do you and dad have? More than $100? More than $1000???) and we simply tell her that we have enough to buy everything that our family needs, and to give to people that don’t have enough.

When I was a kid, my parents didn’t include us on family financial status, they just taught us how to do things that would help in the future. I opened my first savings account in the first grade. My dad taught me credit card responsibility, how to file my taxes and how to look for good interest rates for CD’s at 16 years. I hope to teach my kids to be excited about things like that (when I have kids) :P

Although we still have a lot of debt, my wife and I have been practicing all the above mentioned for the last year and have seen a tremendous improvement in our communication between each other and our children.

my husband and i are tackling some credit card debt right now and we meet every week. i keep a spreadsheet of how much we have in checking/savings, and how much of a balance we have on the cards. we also talk about what spending is coming up and which one of us needs to pay for what.

my husband hates having these meetings because it reminds him of our debt. but i remind him that we are finally facing it together and we will keep meeting! although we are far from it, i don’t want to be one of those couples whose marriage is ruined by money problems. and in the last six weeks we’ve paid over $1300 to credit cards, so i know this is working.

I’m on the fence about the “open book” idea with children. I agree in that they should grow up knowging about income and expenses, and not believing that the checkbook/debit card/ATM is an endless supply of money. But how much specific information should they get? They need to have the maturity to understand that this is private family information and it should not be shared. How will you feel when your son announces at playgroup that daddy makes $XXX, or daddy owes $XXX?

Thank you so much for this post! I have been meaning to set up one of these family money planning meetings for months…or was that years. My wife read your post and she now wants to start doing them starting tonight. The idea just needed to come from someone else.

Our budget meetings don’t involve our children (age 9 and 2), but we have them regularly: twice a month, one for each pay period. Sometimes we meet more frequently if something comes up and we need to adjust.

This simple practice has made our marriage extraordinarily strong. We don’t fight about money. This is a formula for a lasting marriage because the #1 cause for divorce in the USA is money fights/money problems.

As for children – I don’t think it is any of their business how much the household income is. I imagine this would become a point of bragging (or getting teased) among their friends. I do believe in *teaching* them the proper ways to handle money, because Proverbs 22:6 says “Train a child up in the way he will go and he will not depart from it.” Note that is right before Prov 22:7, “The rich rules over the poor and the borrower is slave to the lender.”

So teach your children about money and how to stay out of debt, so they do not become slaves. That doesn’t mean you need to tell them every detail of the household finances.

Great idea…We do something similar…I budget all the expenses and compare it with our expenses the previous month…Actually I update the budget atleast once a week..This way I know straightaway if we are going way over in a particular category…

Great word there…it’s just me and my wife right now and we subscribe to this theory. I handle a majority of it, but my wife knows everything that is going on. My parents didn’t share a lot with us, but did teach us the value of budgeting. I’m 25 and still don’t know what the big man makes.

I completely agree with the idea of a monthly (or however often you need) financial meeting with your spouse. I even agree with letting kids in on SOME aspects of your financial life. I don’t believe that they need to know all the details though…certainly not exactly how much money the family makes or even necessarily the amount of debt. Atleast not until they are much older (college age perhaps). My parents (father in particular) did an excellent job teaching me about all sorts of financial stuff – credit, management of accounts, stocks etc. without ever telling me the details of his finacial picture. In fact, he was adament that my sister and I not know the specifics. As a mother of two small children (6 and 2) I see the wisdom of that decision. Not only is that way more information than any kid needs but that is way more information than they know what to do with. Until they have some real world experience then the numbers don’t mean that much to them no matter how much other info you share with them about where that money goes. And, frankly, if you share that information with a kid, they are going to share it with everyone they know no matter how much you try to impress on them not to.

I don’t have kids, so my perspective should probably be taken with a grain of salt, but I think that just seeing that you’re having these monthly meetings would be great for kids, even if I’d be hesitant to open all the details to a child. Hearing and seeing Mommy and Daddy sit down to go over bills and talk about finances would likely have a big impact on a child as he grew up. I know I learned from seeing my mother sit down with her checkbook to balance it and to pay all the bills on a regular basis, even if I didn’t know the specifics.

I would worry that the numbers involved in a household budget would really throw kids off if you were totally open. They’re saving allowance for a $50 toy, and they see $1500 as the checking account balance, and they won’t understand why that doesn’t mean you can’t just go out and buy the toy if it’s not in the budget. Until they reach an age where they have the maturity to understand the details, I think you’re just asking for trouble.

This is a great post! Thank you. I am a bit concerned about the part of sharing all financial information with the children, even teens and college students. I am a college professor and I often have students in a great deal of anxiety about the financial problems their parents face. It affects their schoolwork and some consider dropping out of school. Also there are some parents, the immature in secure ones, who drag their kids into very adult issues that they as parents should be handling themselves; they take the joy and freedom of being a young person away from their children. Children need to grow up secure, believing that their parents have enough money to take care of them. Without dragging the kids into the gory details, one way for them feel secure is to know that their parents are fiscally responsible and that saving is a family value. If they save and see their parents save, they will realize that there is money for emergencies and sometime for fun things, too. But, really, this was a wonderful post!

I’m really curious if anybody has a response to Dave, the first commenter. My nephew has a similar problem when it comes to school work. He just doesn’t see the value in studying hard and getting good grades. Telling him about the future doesn’t seem to make an impression. I’d love to have some trick up my sleeve so that when I have kids I can avert any potential problems like that!

I liked the article and I love the idea of a family meeting about financial matters.

However, I’m on the side of those saying that Mom and Dad should be mature enough to hammer out the details of income vs. expenses between themselves.

Why? I grew up knowing debt was an issue between my Mom and Dad.

When I learned as an adult how much that debt was, I was terrified the credit card companies would come calling once my parent who racked up the debt died. I’ll freely admit that I’m an anxious person, but the figure would make anyone anxious. I was so relieved when I was told I would not be responsible for any debts my parent incurred during their life.

On the other hand, if Mom or Dad loses their job or gets sick, it’s not hard for their children to figure out there will be less income. As a result, most children will feel that anxiety anyway.

While I’m not sure it’s a good idea for parents to share all the gory details of their finances with their children, I do think it’s a good idea for them to be relatively open about their decisions and, if they are handling money in a mature way, it’s good for them to model this behavior to their kids.

My mom and dad were very smart with their money, bu they were actvely secretive about it as well. So while they would issue platitudes like “don’t be a spendthrift,” they taught me no specific money-management skills, and did not even model their own skills to me. My mom would pay bills in her bedroom with the *door locked!*

I actually think it was because my parents disagreed about handling money; my dad is a saver, my mom a spender. Dad simply did not *let* my (home-maker) mom make any big finanical decisions, and my mom stuck to the budget he set her. So they are in good shape now. But it was a poor environment for learning money management skills. My sibliings and I all took about 15 – 20 years of adulthood to learn them on our own.

I an also on the fence about sharing specifics with children. I don’t think kids ever need to know how much you make, but it is important for them to hear you talking about saving, budgeting, setting goals, etc. Especially for teenagers, it can be incredible eye-opening to see a $200 heat bill just to get a perspective on how much things cost.

Thanks for the post Trent. I too am a struggling parent, like many of the posters. I was raised to believe that my folks money was simply not my business and they simply don’t teach enough useful skills in school. Fastforward to adulthood; married a man who took care of our finances for nearly 15 years, until the day he died, leaving me to fend for myself and our nine year old. Suffice to say, I had (still have) alot to learn!

Several of the posters seem concerned about their children’s sense of security and I can attest to this first hand. Because of his dad’s death, my son felt very scared, and I have spent the better part of the last 8 years trying to convince him that his basic security is not at stake.

Where does that leave us? Well, as parents it is our responsibility to teach our children life skills but I think it is important to make sure they have the maturity level to handle the lesson. In our case, I have found that now that my son has his first job, he is much more receptive to learning about the value of the dollar…he sees just how many it takes to fill his gas tank these days!

Again, thanks for the post and your willingness to start conversations about things that most people avoid like the plague!

This is really tough. It’s hard for kids not to talk about the parents money with their “close” friends, or with an uncle, aunt, or grandparent who they might feel they don’t need to keep the information from. So if you lay the books bare with them, I would pretty much expect it will become general knowledge what you make in your neighborhood and among your family.
We also had an incident with a kid bragging to our son how his dad made a ton more money than I did. Apparently the kid got a look at their tax forms and knowing the father, he didn’t do a good job of putting their money in perspective. This actually was good for us since it prompted discussions on values, career choices, lifestyle choices, etc. However, it also let me see that speaking to a preteen about the details of what you make without their having the ability to put it in context, can really create some warped impressions.
Typically when I talk about bills with the kids I put it in terms of percentages. That way, they may not know the specifics, but they have an idea that the mortgage, utilities, bill payments, groceries, etc. eat up those percentages real quick. It also allows for them to see how your spending without knowing all the details. They know that their activities (instrument rental, soccer, softball, etc.) are taking a percentage of the money the family makes.

It is so important to tailor the teaching to the age and maturity of the child. Assume that everything you tell a young child as going into the public domain because it will, probably the next day.

I think that for elementary school age you concentrate on the child’s finances (allowance), as they are totally self centered anyway. Introduce some specific things like saving for a vacation and the budgeting of how much will be spent on various expenses there.

In junior high introduce things like the food budget for the family, wise shopping, cooking skills, and some investing concepts such as cds or mutual funds. They might get excited about helping with the research for major large purchases such as cars.

In high school is where you get down to more specifics such as your own situation of income and budgeting. In other words, when they are old enough to have some discretion. I found that having them balance my checkbook and help pay the bills was a real eye opener for them. They figured out pretty fast that some of their friends had nice new stuff but had trouble paying the bills. We had much less stuff and they knew we could last for months if jobs were lost, which eventually did happen. They also knew they could go to college and acted accordingly in their studies.

Lots of good ideas in this post, thanks. Sharing our goals and working as a team is unquestionably the most important thing we’ve done financial. It’s great for our relationship too.

Like several others, I also disagree with telling your children everything, at least for my own family.

We make a lot of money. By the time we have kids old enough to ask about it, I can only imagine it will be more. We also use our money much differently from most folks we know – saving and giving are lacking in a lot of people’s lives. So it doesn’t look like we make nearly what we do.

I think it’s hard for kids to keep quiet about that kind of stuff. I would hate for someone to feel bad or resentful, or whatever other negative thing might happen, if they got this information they really didn’t need to know. I can envision this happening with certain members of our families or some of our friends.

I also think it’s hard for kids to even conceive of the kinds of money grown-ups talk about. For example, the reality of those college loans was not at all clear to me until well after college. I think it may make them even more likely to talk about confusing sums of money as they try to sort it out. As others have mentioned, other kids may say inappropriate things and I don’t want ours hitting back with any information we give them. They will be comfortable and well taken care of, and that is enough for them to know.

I grew up always worried about my parents finances. Finding a way to eliminate that for our kids and teach them to responsible will certainly be a balancing act. I think I’ll be able to let them in on budgeting and planning and being frugal, as well as our values about money, without telling all. For us, that will be a better solution.

Everyone, I just want to note that this secrecy about how much you make is a cultural value. In many other countries, probably most other countries, people talk freely and openly about their salaries. When I visited Taiwan, my mother’s country, a few years ago, someone even asked me what my MOM makes! (I was a student, so I guess he figured I wasn’t making any money.) And then people admonished me for taking offense! The idea that no one, even your children, should know what you make isn’t universal and, if you think about it, isn’t all that beneficial. Of course, if you want your children to obey American social norms, either don’t tell them your salary or tell them and tell them not to tell anyone. But don’t pretend that you’re doing something other than obeying a local social norm.

I think it is great you guys meet once a month! I am trying to get there in my marriage and your posts are helping us get there. Thanks!

I agree with the need to teach your children finances. However, I do not think they need to be burdened with the specifics of an adult budget. It cannot be a good thing to have your children stressing about adult issues. My husband grew up in such a family and now he has a very difficult time when it comes to money issues. He is constantly worried that he will become like his parents, even though we are FAR from being anything like them.

1. Provincial values are inferior to universal values.
2. Most cultures frown on financial privacy.
3. Taiwan is like most of the world and America is not.
4. Those who favor financial privacy haven’t thought about it.
5. Those who favor financial privacy believe it is a universal value.

I like this post; Charles and I have never sat down to actually discuss our money, but we are very similar when it comes to money so it’s never been an issue. I don’t know that it’s necessary to have a monthly meeting with the kids to instill a sense of financial security, though. I picked up most, if not all, of my spending habits just from living with my parents for the first 18 years of my life. I truly believe that, if you believe in what you’re doing, your kids will pick up on it. But I’ll get back to you on that one when we have our own :-)

2 and 3. From what I’ve read in other places, Europeans generally don’t keep their salaries as private either. (I do mean income, too- no one anywhere gives away their bank account information!) I am open and interested in people with firsthand knowledge sharing their experiences.

4 and 5. Going up as a United States citizen, I certainly didn’t think about income privacy as a social norm; I didn’t think about it at all: it was just something that everyone did. I was so shocked when that guy asked about my mother’s income, but then when I thought about it I was shocked at how shocked I was. I hadn’t realized that the fact that salaries should be private was a belief at all until I was challenged in this way. More generally, many social beliefs are so ingrained in people that they don’t realize that they may not be true or that they may not represent the best way.

I’m not convinced that hiding salary information is a good social norm for a society. It privileges bosses over workers, because owners have essential information that workers don’t when workers try to negotiate salary. Also, I think it encourages people to feel ashamed if they have a low salary, so they try to buy stuff to appear rich.

But I’m not try to change society here. I’ll keep my mouth shut around random people. But the fact that people feel so strongly about income privacy that they won’t tell their loved ones about their financial situation tells me that something is off. I would encourage those people to examine their beliefs about money and privacy and see if those make sense in the context of family and the people they trust most.

One exception I would suggest to being so open about financial data with your kids: if your children have parents who do not live with you, aka former spouses. Little pitchers have big ears, but they also tend to pour out inappropriate information to people they shouldn’t. My husband’s ex-wife doesn’t need to know his salary or how much we pay for our mortgage and I don’t want our kid to have to bear the burden of selective secrecy. He shouldn’t have to hide anything from his mother.

Very thought provoking post. I agree that spouses should have regular meetings to review finances — and deal with tactical issues (bills) as well as strategic planning (setting goals, retirement planning, asset allocation review, etc…).

Like many other people, however, I don’t think it’s appropriate to go over all the income and line items in a budget with children. I think most children would get overwhelmed and I also think most would share personal financial decisions with other people. Having lived in a family that didn’t talk about money I understand where Trent is coming from in terms of wanting to teach his children. However, I think there’s a time and place for doing that. Sitting your 7 yr old down at the table to review finances is treating your child like he/she is an equal sends some troublesome messages.

I for one know I don’t want the whole neighborhood knowing how much we make. Nor do I want my kids to worry about bills or thinking that paying them is their responsibility. As the parents it is our responsibility to manage the household and this means paying the bills, doing the financial planning and teaching our kids about the value of work and money. This doesn’t have to be done in the same sitting. I think the best way to teach our kids the value of work and money is to be working together as parents in harmony (not fighting about money) and making responsible choices. Even if you don’t break it down kids know when their parents are doing this. They pick up on so much. I think that we can find ways throughout the day in which we can also find “teachable” moments to explain financial decisions to our kids.

I do think that once your kids become adults it is important to share financial details with them. At this point children can handle it and it also opens up the dialog around what a parents’ financial needs are as well as what kind of expectations the parent has from their children (do mom and dad have enough for their own retirement, etc.)

Wanda, thanks for the reply. I think this modern secrecy descends from an (ideal) virtue of English aristocracy, which explains why other countries don’t share it much. Their incomes were obvious, but out of modesty they (somewhat) pretended they were secret. Today, we keep our incomes secret but act as immodest as possible. So something should change, but I would rather repair a damaged virtue than throw it away.

I think this was an excellent post – one of your best. If kids don’t learn about money management at home, they will go out into the world without a clue. Financial privacy I can see if you don’t want your kids going around telling the rest of the neighborhood how much you make, but once they get old enough to keep their mouths shut I think its a great idea to let them see your whole financial universe so they know how it works. I think a lot of kids today have an unrealistic view of personal finance, and I think a lot of it is because their parents didn’t teach them anything with real life examples. “Ask and you shall receive” is not a proverb to be taught to kids about money, but it really is what it comes down to if kids don’t know anything about your financial situation.

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